John Nunez was paid $11,250 after he lost a reelection bid in March 2009. Two state senators have proposed legislation to ensure officials ousted by voters can't qualify for unemployment.

Reporting from Sacramento — Alarmed that a Rosemead city councilman collected unemployment benefits after he was ousted by voters, state lawmakers are proposing to prevent such payments in the future.

John Nunez was paid $11,250 in state unemployment benefits, covered by the city, after he lost a re-election bid in March 2009. The city challenged the claim and sought reimbursement, but the state Employment Development Department sent a letter Feb. 25 saying that the city was on the hook for the money.

Nunez stopped collecting payments after his benefits ran out in September.

Although state law says elected officials should not get unemployment benefits, there is some ambiguity about whether that applies only to elected state officials or also those holding city offices, said Assistant City Manager Matthew Hawksworth.

State Sens. Gloria Romero (D-Los Angeles) and Bob Dutton (R-Rancho Cucamonga) have introduced legislation to make clear that the restriction applies to all elected officials, including those in cities. The measure, SB 1211, also addresses errors in financial reporting by cities.

"As elected officials, we are public servants who answer a call to give, not to receive," Romero said. "I am outraged to hear that an elected official would file for unemployment, and I am committed to ensuring that this never happens again."

Neither Nunez nor his attorney returned calls seeking comment.

Nunez was elected to the City Council in 2005, and was receiving a monthly salary of $2,318. When he stood for reelection last year, he finished last among six candidates seeking three seats on the council, garnering 13% of the vote.

He applied for and received $450 a week in unemployment benefits, arguing that he had lost his job. But the city took the position that failure to be reelected by voters is not the same as being fired from a job.

In denying the city's challenge, Pam Harris, a chief deputy director of the Employment Development Department, wrote that the city had reported Nunez's wages to the state incorrectly.

"Wages as a council member should not have been used for the purpose of establishing and funding a valid UI [unemployment insurance] claim," she wrote.

Dutton said the case is outrageous at a time when the state is struggling to address an unemployment rate that hit 12.5% in January.